A group of investors urged four of the major oil and gas corporations in the world to establish broad climate goals for 2030, putting pressure on the industry after a year in which governments turned their attention to energy security.
Before the annual general meetings of BP, Chevron, Exxon Mobil, and Shell next year, activist group Follow This claimed to have co-filed the resolutions with six significant institutional investors managing $1.3 trillion in assets.
The resolutions demand that businesses make goals to cut their greenhouse gas emissions by 2030. It is particularly those from gasoline sold to consumers (often referred to as Scope 3 emissions). They are responsible for the vast majority of the sector’s pollution.
Investors pressure oil companies to reach climate goals
Investor pressure on the oil and gas industry to combat climate change has increased in recent years. Shareholder support for the Follow This climate-related motions has increased.
However, last year’s initiatives mainly failed as a result of investors’ shifting attention to increasing energy prices and energy security in the wake of Russia’s invasion of Ukraine.
Companies have stretchy climate goals
BP, Shell, and Chevron have all established 2030 goals for reducing greenhouse gas emissions, including Scope 3. It was stated that they are not in line with the UN’s goals to keep global warming to 1.5 degrees Celsius over pre-industrial levels.
Exxon, which doesn’t have Scope 3 targets, claims that the methodology used to determine them is incorrect. According to the study, the methodology has the unintended effect of shifting responsibility for carbon footprint on others. As when businesses are penalized for increasing natural gas production in favor of coal, a more polluting fuel.
Chevron stated that it cherishes shareholder feedback and will consider any proposals. BP remained silent.
Follow This has repeatedly put forth shareholder resolutions that are overly straightforward, unfeasible, and detrimental to Shell. According to a Shell representative, they are still dedicated to positive interaction with our investors.
Who are the investors pushing climate goals?
Edmond de Rothschild Asset Management, Degroof Petercam Asset Management, and Achmea Asset Management are among the investors who jointly filed the resolutions. The other backers’ identities are unknown.
Shell has significantly improved its climate targets. However, according to Jean-Philippe Desmartin, head of responsible investment at Edmond de Rothschild Asset Management, it still lacks a concrete 2030 (emission reduction) target.
By cutting back on oil and gas production and expanding the use of low-carbon and renewable energy sources, Shell, BP, and other European competitors like TotalEnergies and Eni have set policies and goals to reduce emissions to net-zero levels by the year 2050.
Oils companies have no space to skip climate goals
According to to Follow This creator Mark van Baal, the oil companies have no space to maneuver given the focus on Scope 3 by 2030 and the goal of “net zero emissions by 2050.”
Right-leaning investors and Republican lawmakers in the United States led a wave of initiatives in 2022 to draw executives’ attention away from environmental, social and governance (ESG) issues.
Exxon and Chevron have effectively thwarted previous attempts to file climate resolutions with the Securities and ExchangeExxon and Chevron have effectively thwarted previous attempts to file climate resolutions with the Securities and Exchange.